The 27 bln yuan expansion of Beijing Capital International Airport is set for completion in February 2008 when its third terminal opens for business, officials said.

The 986,000 square meter terminal is a crucial addition to the overstrained airport ahead of the Beijing Olympics next August. The airport has a design capacity of 35 mln passengers but last year handled 48.7 mln.

The new terminal, to be mainly used by Air China and its partners in the Star Alliance - which it is set to join this year - will raise capacity to around 66 mln passengers next year, pushing the airport into the world's top five busiest.

"The (airport's) present limited conditions will be transformed and we will have full and comprehensive resources to support the Olympic Games," said Zhang Zhong, general manager of Beijing Capital International Airport Co, a Hong Kong-listed company chiefly responsible for operating both aviation and non-aviation business at the airport.

Zhang told reporters that the government contributed 4.8 bln yuan to the expansion project, while Beijing Capital International Airport paid the remaining 22.2 bln.

As part of the expansion, a third runway will be opened at the airport this month. Foreign companies have been awarded contracts in the airport's new phase, with the likes of Siemens winning a contract for its baggage handling system, and Bombardier its rail links.

Soaring demand is likely to continue long after the Olympics, and Zhang said a team has been set up to study site options for a second airport in the capital. He did not elaborate.

Growth continues apace in other cities also, with Shanghai and Guangzhou both undergoing expansion projects to take the annual capacity of their main airports to 50-60 mln passengers.